High Court Rejects Microsoft Browser Appeal

The U.S. Supreme Court rejected an appeal by Microsoft in the long-running patent dispute over browser plug-ins brought by Eolas Technologies.

This time, Microsoft could end up paying damages as a result of the high court’s decision not to take up its appeal.

“The ruling confirms the pattern of judgments supporting the University’s position and the original jury verdict that Microsoft infringed on our patented technology and should provide fair compensation for its use in their products,” said Trey Davis, University of California director of special projects and new media. The university owns the intellectual property on which Eolas is based.

He noted that the United States Patent & Trademarks Office upheld the Eolas patent during a re-examination.

Part of the prior judgment levied against Microsoft in the ongoing trial regarding the browser plug-in technology was based on sales outside the United States. Microsoft argued to the Supreme Court that it only shipped a master disc with software to foreign OEMs, who then handled “manufacturing.”

This law, known as the “golden disc master rule,” has long been decided, according to John Rabena, an attorney specializing in intellectual property with the law firm of Sughrue Mion.

“When you have a disc of software and send it out of the country and then out there somewhere else they keep copying it and selling it, those damages are counted right now,” Rabena said. “This was a significant issue to a lot of software companies, but it’s fairly clear from statute and prior case law that those types of sales count.”

However, the ruling won’t affect a new trial that’s expected to consider whether the patent should be thrown out due to alleged unethical actions on the part of Eolas CEO Michael Doyle. According to U.S. law, a patent is not valid if the patentee took unethical actions such as not informing the patent examiner of possible prior art.

In March, a federal appeals court upheld the lower court’s interpretation of the Eolas patent on browser plug-ins, but said the jury should have considered whether the patent itself is valid.

“We will continue with the trial of the remanded case before the district court and are confident that our position will ultimately prevail,” said Microsoft spokesman Jack Evans.

The new trial will hinge on whether Viola, an early browser created by Perry Pei-Yuan Wei, qualifies as prior art that should have disqualified Eolas from patenting its technology. Wei claims that Viola did support interactive objects and that he showed Viola to Doyle before the latter applied for a patent. Doyle’s application did not mention Viola.

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